In an analysis of the current state of the cryptocurrency market, Bitfinex warned investors that the Bitcoin (BTC) liquidity crisis may thwart the bulls’ plans to push the value of BTC to $20,000. In addition, the recent increase of about 10% in the past seven days may be reversed due to liquidity issues.
Bitfinex notes that the low range of volatility seen in Bitcoin, with small daily highs and lows of less than 1%, Occurred due to low liquidity in the market.
The company refers to the total depth of the market It dropped from over 14,000 BTC to 6,500 BTC in November and has failed to return above the 10,000 BTC mark since then.
“The bottom line is that a large order of the same US dollar value or volume placed today will have more than twice the price impact than it did two months ago. This is very disappointing for the whales and the big trading companies.”
Still, according to Bitfinex analysis, this liquidity crisis was already being faced by Bitcoin throughout 2022, But it was exacerbated by the FTX/Alameda failure that also hit other liquidity providers.
In light of this, the company warns that investors should be aware of the recent bullish moves, If not supported by increased liquidity, the gains made by the bulls in the short term are likely to be reversed.
6 promising encryption
Although the short-term trend is still bearish, cryptocurrency investor and entrepreneur Julio Mayah understands that the long-term trend is not affected by the 2022 bear market, just as it was not affected by the previous bear market.
Maiah points out that this could be an important moment for investors who believe in the medium and long term that it is positive to invest in “currencies that tend to rise. There are at least three main sectors: currencies, smart contract platforms, and information technology.”
The entrepreneur shared a list of 6 cryptocurrencies that, along with Bitcoin, he believes have bullish potential and should be on investors’ radar.
Maiah’s list starts with Ethereum (ETH), according to him, its big difference is allowing the creation of smart contracts and with that it has fueled major market trends like ICOs, DeFi, NFTs and now the metaverse.
The expert also mentions BNB, Binance crypto-origin, and BNB Chain native token.
“One of the reasons why it is considered a promising cryptocurrency for 2023 relates to the strong performance of the asset and the company’s business strategy. In this context, it is worth noting that they have received many awards from specialists, which has made the currency one of the most traded currencies in the world today,” he says.
The list also includes the stablecoin USDC, which while not a cryptocurrency that will increase its value, Maiah highlights its potential in staking protocols and farming. The largest memecoin on the market, Dogecoin (DOGE) is also on the list, as its ubiquity has made DOGE the gateway for many newcomers to the crypto ecosystem.
Maiah also believes that Polygon (Matic) can become a great interoperable link between blockchains. Rounding out the list is Chainlink (LINK) which he points out should also benefit from interoperability between smart contracts.
Disclaimer: This is not an investment recommendation and the opinions and information contained in this text do not necessarily reflect the positions of Cointelegraph Brasil. Every investment must be accompanied by research and the investor must be informed before making a decision.